SEC moves forward with 'conflict minerals' rule

American companies that rely on so-called "conflict minerals" would have to file an annual report to the Securities and Exchange Commission and post its findings on its own website detailing where the minerals came from, including if they originated in combat-riddled areas of Africa, under proposed rules unveiled by the SEC.

The rules would implement a provision, included in the Dodd-Frank financial regulatory overhaul, that is intended to make companies more accountable for the trade of minerals that have driven conflict in the Democratic Republic of the Congo (DRC) over the last several years.

The rules would require companies to inform the SEC on an annual basis whether they rely on minerals originating from the DRC or adjoining countries. Specifically, the "conflict minerals" include tin, tantalum, gold and tungsten, and companies would have to report to the SEC if those minerals were necessary to the "functionality or production" of their products. These minerals are crucial to a wide variety of products, ranging from jewelry to jet engines.

Under the proposal, if a company determines its minerals did originate from the DRC area, or even if it is unable to determine that they did not come from that area, they are required to inform the SEC of their findings and file a Conflict Minerals Report. That report then would have to published on the company's website.

The report would describe the products made with the minerals, where they came from and the efforts the company made to determine the specific mine or other location of origin for the conflict minerals.

In addition, companies would have to describe what steps they are taking to monitor the chain of custody of their minerals.

The SEC is accepting public comments on the provision until Jan. 31. It will then weigh the comments before finalizing the rules.